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HONG KONG/BEIJING (Reuters) -Hong Kong-listed shares of China’s WuXi AppTec jumped as much as 9.8% on Monday after it said it has no links with any governments or their military organisations, and it should not be listed as a “biotechnology company of concern” in a draft U.S. bill.
The drug research and development group said in a filing to the Shanghai Stock Exchange on Sunday that it has no human genomics business and does not collect human genome data in any of its existing businesses.
The company “has not, does not and will not pose a national security risk to any country,” it said.
A U.S. congressional committee focused on China has introduced a bill that would restrict federally funded medical providers from contracting WuXi AppTec and other Chinese biotech companies, citing WuXi AppTec’s alleged military ties as part of the reason.
WuXi AppTec’s Hong Kong-listed shares rose as much as 9.8% to HK$48.00 after plunging 21% on Friday amid investor fears over the U.S. draft bill. Shares of WuXi AppTec, which provides drug research and development and manufacturing services, closed up 4%.
Its Shanghai-listed shares closed down 4%, paring earlier losses of nearly 10%, while its affiliate, vaccine maker WuXi Biologics (HK:) closed up 3.1%.
“This is an investor confidence problem … this year is the U.S. election year, so there could be a lot of similar news in terms of restrictions on China (companies) going forward that weigh on investor confidence,” said Steven Leung, director of institutional sales at UOB Kay Hian in Hong Kong.
WuXi AppTec’s Hong Kong shares lost HK$8.08 billion ($1.03 billion) in market value last week, while its Shanghai shares lost 40.4 billion yuan ($5.61 billion), resulting in a combined loss of $6.64 billion for the stock. WuXi Biologics lost HK$33.08 billion ($4.23 billion) in market value last week.
The U.S. bill would prohibit federal agencies from contracting with China’s BGI Group, WuXi AppTec, their subsidiaries, affiliates and other biotechnology companies of concern. It would also stop the government from entering into contracts with companies that use their equipment or services.
A U.S. Senate aide and three other sources told Reuters the bill had been delayed and would be considered at a future date.
BGI Group, which is not listed, has said it supports protecting personal data, but the legislation “which will effectively drive BGI from the U.S. market will not accomplish this goal.” The company added that in the U.S. it does not collect patient samples or have access to personal or genetic data.
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